A series of strong earthquakes over the weekend have severely damaged infrastructure and buildings in southeast Taiwan. Officials said on Monday that one person was killed and 146 others injured.
The biggest quake, which measured 6.9, struck Chishang township, 50km north of Taitung, at 2.45pm on Sunday. It followed a 6.5 quake in the same area about 17 hours earlier.
Taiwan lies in a region where three major tectonic plates intersect, US geologists say, who added that there have been over 230 other quakes in and around this area over the past century.
And while a number of bridges and rail lines were destroyed or impaired on Saturday and Sunday, casualties and the total damage bill were far less than a big quake that rocked the island in 1999, which killed nearly 2,300 people.
Four people were rescued after being trapped under the rubble of one building, Taiwan’s official Central News Agency (CNA) reported.
About 20 passengers were evacuated after a train derailed in the area, but there were no casualties from the incident, according to the Taiwan Railway Administration.
More than 100 soldiers were been deployed in Hualien county, on the island’s east coast, to assist with disaster relief efforts, a defence ministry spokesperson said.
Moderate Rate Rise Tipped
In related news, Taiwan will likely raise its policy rate at a moderate rate this week as inflation and exports slow, economists forecast.
The central bank is expected to lift the benchmark discount rate by 12.5 basis points to 1.625%, according to the median prediction on 22 economists surveyed.
Five of the economists surveyed said they expected stronger action, a 25-basis-point rise to 1.75%, while one economist predicted it rising to 2%.
The central bank has repeatedly said it will tighten monetary policy this year, in line with counterparts elsewhere.
The economists told a Reuters poll said they expected Taiwan to keep raising the rate until the second quarter of next year, to bring it up to 2%, and then cut it from the fourth quarter of 2023.
Taiwan’s rate decision will come the day after the U.S. Federal Reserve announces its own. The Fed is again expected to act to control spiralling inflation there, with markets pricing in an interest rate hike of at least 75 basis points.
Taiwan’s inflation, which was never as bad as in the United States or Europe, is slowing. Its consumer price index was 2.66% higher in August than a year earlier, the lowest reading in half a year.
The trade-dependent economy is also beginning to show signs of fatigue due to softer consumer demand in major markets China, the United States and Europe. Taiwan’s exports last month rose just 2% on-year and could get worse as the year progresses.
MasterLink Securities Investment Advisory analyst Anita Hsu said the worsening of export momentum had come earlier than expected.
“Judging from Taiwan’s current fundamentals, a 12.5 bps rise should be enough.”
While the economy last year grew 6.45%, the fastest rate since it expanded 10.25% in 2010, it is expected to grow much more slowly this year, hit by Covid lockdowns in China and the impact of the war in Ukraine.
Taiwan’s statistics agency last month lowered its gross domestic product forecast for 2022 to 3.76%, down from May’s 3.91% forecast. It also trimmed the export outlook for the year.
The central bank will give its revised forecast for 2022 economic growth on Thursday. In June, it predicted a 3.75% expansion.
It will also give its first prediction for next year’s economic growth.
- Reuters, with additional editing from Alfie Habershon and Jim Pollard